If I am buying a short sale home is the process easier when buying the house in cash. The sellers have

Asked by Scrappinjenn, Eugene, OR Sun May 17, 2009

accepted the offer will the process be faster being its a cash sale and no other offers are on the table and haven't been accepted by the sellers?

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11
Jan Sohlman, Agent, Eugene, OR
Thu Oct 28, 2010
Short sales have to have 3rd party(lender approval). The bottom line for the lender or lenders if there is more then one lien holder is getting as much recovery on their money as the market will bear. Broker price opinions will be ordered by the lender so they know what is realistic to expect. Once the seller accepts an offer and the 3rd party also accepts then the transaction can be speedier for you, the buyer when you have cash to complete the transaction as you will not have to wait for your financing including an appraisal on the property for your lender. Cash transition vs financing will not influence the final price that the 3party will agree to it could only benefit you in a speedier close. Jan Sohlman, Principal Broker Re/ max Integrity
2 votes
Dohn Riley, Agent, Eugene, OR
Tue Sep 14, 2010
Cash does not have more leverage than a well-qualified person who will obtain a loan. The bank will have either an appraisal or a BPO (Broker Price Opinion) done and then will use a formula to determine the net that they believe the sale should provide them. Usually they multiple the BPO by a factor like 85 to 88%. This is the net that they want. In this soft market the buyer has more power than usual. However, cash does not have as much influence the final price.
1 vote
Kelly Gebler, Agent, Portland, OR
Sun May 17, 2009
Hello - the bulk of the time involved in a short sale is spent waiting for the seller's loan holder(s) to reach their decisions. That process can take anywhere from a week to pretty much never getting an answer and anywhere in between. These types of sales involve alot of research on their part regarding the market value of the home (most of the time they will have 2 appraisals done), and studying the seller's financial capabilities to determine how to negotiate the deficit with him/her. I have had short sale transactions going where we didn't hear anything for more than a month, and when we did finally get a response - the bank countered our offer that the seller had accepted.....which they can and will do if the appraisals they had done support their counter. If the seller has more than one loan and they are with different banks......you are likely in for a very long waiting period.
Having a cash offer shows that you are a solid buyer with no financing contingencies, so you have that in your favor and it should hold some credibility with the bank. While it may not speed up their decision making by much, it will get the sale closed much quicker once they do reach a decision that's accepted by all.
Best of luck to you!

Kelly Gebler
Real Estate Broker & Loan Officer
Keller Williams Realty & Sunset Mortgage Co.
1 vote
Bill Eckler, Agent, Venice, FL
Sun May 17, 2009
The short sale process is a true test of your "real estate patience." Regardless of funding options, as a buyer, you are trying to purchase a home from both the present owners and their bank. Additionally, you are essentially asking the bank to agree to losing money on the proposed transaction.

If you are looking to speed up the process it may be beneficial to focus on short sales that are advertised as being sold a "bank approved" sale prices. But take care to varify the accuracy of this information. In these cases the banks have already worked through the majority of the information gathering and documentation and can move more quickly ......if so inclined.

Good luck
1 vote
Shehla Karim, Agent, Wayne, PA
Sun May 17, 2009
Hi Scrappinjenn,

For buying a short sale you have to be prepared for long settlements. You are at the mercy of the bank, whether you are buying Cash or financing it.

Ofcourse, Cash is King. But, you can't go low balling!

Shehla Karim
WEichert Realtors
610-659-4869
1 vote
Team Wickham, Agent, Eugene Oregon 97401, OR
Wed Feb 16, 2011
I would suppose that you are working with a qualified agent that has worked these short sales before and has closed them. They should of answered this question for you when you made your offer. Cash is great because their will be no appraisal and the seller usually never does any repairs since he is getting nothing out of the deal except that his credit won't be affected as bad as a foreclosure. Lenders typically might want somethings fixed before closed and the banks know this. Once you get approval you can close fast.
I have done many of these and what I am seeing now is that if the loan is a Fannie Mae loan, they end up taking them back anyway. I had one with a cash offer of $125,000 and the bank said yes, the investors said yes, the second got what they needed, and Fannie Mae took it back and put it back on the market for $20,000 less that our accepted offer and it is still on the market at $25,000 less than our original offer. I think that they have decided that the will take them back and offer up their Homepath loan and get their money in the long run rather than now. Beware if it is a Fannie Mae loan.
0 votes
Jamie Paddock…, Agent, Eugene, OR
Wed Jan 12, 2011
Hi- I just closed a cash short sale. It didn't go any faster than the other short sales I'm involved in. It all really depends on which bank, is there a 1st & 2nd Mortgage?, Does the seller even qualify for a short sale?, Where are they at in the short sale process at the time you submit your offer? Have other offers already been submitted? How many short sales has the listing agent closed? How persistant are they?

Knowing which short sales to go after, and which agent to have on your side when working a short sale can determine whether it happens or not. I just closed a short sale that the bank denied because the appraisal came in a little high, so rather than giving up, you have to fight them on it, we disputed the appraisal.. got the bank to lower the appraised value which made the offer fit the % that the bank required they get.
You have to be persistent and make it happen!
Thanks,
Jamie Paddock/Principal Broker, Owner
Elite Realty Professionals
(541)206-8528
Jamie@JamiePaddock.com
Web Reference:  http://www.jamiepaddock.com
0 votes
Mary Bennett…, , Eugene, OR
Wed Nov 17, 2010
It has a lot to do with who the lender is. Local banks are great to deal with . The big national banks hold things up, either intentionally or through poor organization. They are far better to deal with when the property is foreclosed. Then they may prefer cash because of the shorter escrow that's possible. Cash sale is better for you because you won't be required by a lender to get an appraisal. Any money you spend before closing is at risk in a short sale because there is no guarantee that'll it will be closed and could very well be foreclosed out from under you. Just be prepared in a short sale to have it take months and months (our longest was about 9 months). And there is no one to pay for repairs. I wouldn't try to buy under these circumstances without experienced realtors involved. It's a whole lot of work even when we've done lots of them. Mary Bennett, Principal Broker, Bennett & Dean Real Estate
Web Reference:  http://www.bennettdean.com
0 votes
Jeff Nunley,…, , Eugene, OR
Tue Jul 27, 2010
Cash can help however, the process is the process and it just takes time. Also, remember, the driving factor for the lender is the BPO so don't expect to steal a property just because you can pay cash. With a reasonable offer you'll be in good shape but don't expect to breeze through the process.
0 votes
Debra Carson, , Eugene, OR
Wed Jul 21, 2010
CASH IS GOOD , BUT YOU NEED TO KNOW THAT ON A SHORT SALE MANY PEOPLE AND ORGANIZATIONS ARE INVOLVED -- THE OWNER, THE BANK, THE MORTGAGE SERVICE PROVIDER, IF THE LOAN WAS SOLD---WHO IT WAS SOLD TO ( FANNIE MAE) , THE MORTGAGE INSURER , ITS A LONG PROCESS WITH NOT MUCH FEEDBANK TO YOU. IT CAN TAKE A REAL LONG TIME BUT YOU CAN END UP DOING WELL. BEING A CASH BUYER ONE PROBLEM YOU MAY FACE IS THAT THE BANK WOULD DO ANY REPAIRS NEEDED FOR DOING A LOAN ---NEW ROOF, WORKING HEAT ETC AND YOU NEED TO HAVEA GOOD INSPECTION SO YOU KNOW WHAT YOU GETTING INTO
0 votes
Ronda Prewitt, Agent, Eugene, OR
Sun May 17, 2009
Hello, Cash does talk but as long as you realize waiting time and cooperation from a seller on their financial statement and most of all the bank or the servicing department doing their part. Some are a nighmare but you can get a good deal as long as you have a good agent and follow their advice on $
0 votes
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